116 N.Y.S. 816 | N.Y. App. Div. | 1909
Lead Opinion
We agree with the learned surrogate that if these savings bank deposits were mere tentative trusts, revocable by the deceased, .the depositor, during his lifetime, they are taxable under the transfer tax law, although the trust became absolute and irrevocable upon the death of the depositor. The transfer tax law imposes a tax upon the transfer of property when made in contemplation of the death of the transferror, or intended to take effect in possession or enjoyment at or after his death. Tax Law (Laws 1896, p. 868, c. 908) art. 10, § 880.
It is contended on behalf of the appellants, however, that the trust became irrevocable and effective before the death of the deceased. The rule by which this question must be determined is stated in Matter of Totten, 179 N. Y. 112, 125, 71 N. E. 748, 752, 70 L. R. A. 711, as follows:
“A deposit by one person of his own money, in his own name as trustee for another, standing alone, does not establish an irrevocable trust during the lifetime of the depositor. It is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some! unequivocal act or declaration, such as delivery of the passbook or notice to the beneficiary. In case the depositor dies before the beneficiary without revocation, or some -decisive act or declaration of disaffirmance, the presumption*818 arises that an absolute trust was created as to the balance on hand at the death of the depositor.”
To determine whether the deceased completed the gifts in his lifetime, it will be necessary to examine a little further the facts, and in so doing it should be kept in mind that the unequivocal act or declaration required to complete’ the gift is such as delivery of the passbook or notice to the beneficiary.
The facts do not seem to be in dispute. It appears that, besides the widow, the deceased left a daughter, 31 years of age at the time of his death, and two sons, aged 28 and 24 years, respectively, at that time. The deceased had a safe deposit box in which were kept the passbooks and other securities belonging to him and the members of his family. . The deceased and his sons had keys to the deposit box, but all the members of the family seem to have had access thereto, as occasion required. While the sons occasionally had the bank books; I think no such delivery of the passbooks was shown, as of itself, unaided by other acts and declarations of the deceased, would make the trust absolute and irrevocable. It appears, however, that the wife and children were kept informed of the deposits, and the deceased declared to them his purpose in opening the accounts and making the deposits. He often stated to the children that the funds set apart for them would belong to them at the age of 21 years, and told his wife that her funds were hers, at the time the trust was made.
The form of the accounts was not changed, and the moneys were all left in the banks. The deceased used none of the funds himself, nor did he pay -any of the moneys over to his wifé and children, and no request was ever made by them that he do so, except that shortly before his death the daughter requested that the accounts which had been made in trust for her be transferred to her name. That occurred about the time she was married. Up to that time the deceased and his wife and children had lived together as one family; Stress is laid upon this request, and the fact that the account was not transferred,* as showing that the trust was then of a tentative nature. It seems to me, however,' that the conversation as a whole between the father and the daughter does not bear out that claim. She said to her father:
‘‘Father, why could not these accounts made in trust for me in Boston be made over to my name so that I may have them in Rochester near my home?”
The father answered that these accounts were already hers, and had been since she was 21 years of age, and that she had better leave them in Boston, so that he could take care of them when he took care of his own accounts. All of the children were then over 21 years of age, and his statement to her that these accounts were already hers is quite in accord with his previous declarations that the moneys so deposited by him for the children should belong to them at the age of 21 years. There is no evidence to show that the deceased ever retracted the declaration, which he made before the children became of age, that the money should belong to them when they became of age. ■
The mere fact that these accounts were not changed in form, and the moneys paid over to the children at the age of 21 years, is not, as it seems to me, a controlling circumstance to show that the trust was
The case of Tierney v. Fitzpatrick, 122 App. Div. 623, 107 N. Y. Supp. 527, relied on by counsel for respondent, is distinguishable from this case, by the fact that there the proposed gift, consisting of moneys in a savings bank, was not to become effective until after the death of the donor. Here, as has been seen, the trust became absolute and irrevocable during the lifetime of the donor.
The order appealed from should be reversed, with costs, and the order and decree of the surrogate fixing the amount of the taxable estate be modified by deducting therefrom said trust funds and reducing the tax accordingly.
WILLIAMS and ROBSON, JJ., concur.
Dissenting Opinion
Mr. Pierce, the decedent, when he made each deposit in the savings bank to his' credit as trustee for the child named in the certificate, doubtless intended that at some time the money would belong to the person designated. He did not, however, irrevocably part with his title to the money, and his conduct with reference to the deposit indicates that he proposed to retain not alone the control and dominion over each of these deposits, but the right at any time to revoke the apparent trusteeship and use the money as he desired. He was anxious to aid his children, yet with his thrift and caution he retained the real ownership of the property in order that he might be prepared for any stress of circumstances calling for its’ use. The trust, if any, was tentative only. He kept the possession of the certificates. To be sure, they were in the deposit box to which his sons had access. The box was a general depository for the valuables of the family apparently, and there is no pretense that any of the children exercised any dominion over these certificates. One of them occasionally adjusted the interest, but even this clerical work was performed at the explicit direction of the father.
It is claimed that these deposits were intended to become effective as each child arrived at maturity. Whatever may have been his intention, there was no delivery over of any certificate of deposit as each child reached the alleged culminating period. The father kept close supervision and dominion over the same as before, although the youngest of his children was 24 years of age when the old gentleman died. One of the sons testified to declarations of his father that these deposits would belong to the children as each became 21 years of age. Again, when the daughter, several years after her, majority and upon her marriage, asked her father for the money deposited for her benefit, he said it was hers, but he would retain it. The significant fact is he kept the money until his death. He had accumulated this property and evidently proposed to keep it until his death, and I am convinced that he did not expect these gifts, if such they were, would become effective in any event until he died.
There were no specific findings by the- surrogate, but his decree directing the imposition' of the tax and the order confirming the same upon appeal in effect settle the questions of fact adversely to the appellants.
The decree and order of the surrogate should be affirmed, with costs.
McLENNAN, P. J., concurs.
